Multibagger stock: An investment of Rs 1 lakh a year back gave 313% price returns

The lesser-known company under the umbrella of Jubilant Group of companies is all set to give multi-bagger returns.

Amid the swinging sentiment in the hitherto bull rally, the markets are finally coming to wake up to the perils of exorbitant valuations (P/E ratio), which seems unjustified and unsustainable.

The likes of IRCTC, Asian Paints bore the brunt in the last few trading session.

The world is suddenly realizing the virtues of Value Investing.

One such value pick is Jubilant Industries which has given multibagger returns in the last one year of 313%.

The multibagger stock of 2021 has risen from Rs 129.35 to Rs 539 in the last one year, logging around a 313% rise in this period. Likewise in year-to-date time, this multibagger stock has risen from Rs 235 levels logging around 129 per cent rise in 2021. 

Just within the time frame of a year, an investment of Rs 1 lakh would have become Rs 3.13 lakhs approx. Amazingly, this is just the beginning of the growth story of this Agricultural and Performance Polymers business of the Jubilant Bhartia group.

The Company’s diversified portfolio of Agri products(46% share of revenue), Performance Polymers (54% share of revenue) and IMFL businesses delivers a broad range of technology-based products and solutions to customers in India as well as globally. Over the years, this business has attained a significant size in India and the company aims at scaling up its business in global markets.

1. JIL is established as number one in India and globally within the top 3, for manufacturing VP latex used in the dipping of tyre cord and conveyor belt fabric.

2. It is one of the leading manufacturers of Single Super Phosphate (SSP) in India which is also the largest selling product under the Ramban Umbrella.

3. The Consumer Products business is focused on providing customers with a complete range of woodworking solutions ie adhesives and wood finishes, footwear adhesives and epoxy sealants. With a nationwide network and brand presence, they represent as brand name of 'JIVANJOR'.

4. Under the food polymer segment, Vamipol is a major raw material for making gum base for chewing gum and bubble gum. Jubilant is one of the three major global suppliers of Solid Poly Vinyl Acetate (SPVA).Suppliers to market leaders worldwide - The WM Wrigley Jr. Company, Cadbury (The Kraft foods Company) & Perfetti Van Melle Co.

The company has shown considerable traction in its topline performance by way of expanding into new markets and launching new products. The company has logged a YoY growth of 89% in its net sales in the recently reported Q2 FY 2022 numbers. Operational efficiencies have led to Core EBITDA to grow at 112 and Net Profit increased by 106% on a YoY basis. The company is available at a reasonable Price Earning multiple of 25x as compared to other players in the segments.

With the fast recovery in the real estate sector, the company is expected to register good growth. The Brand “Jivanjor” which competes with the market leader “Fevicol” is gaining a strong presence. Also, the demand outburst seen in the Automobile sector is set to boost the demand for the latex segment.

The company continues to be a multibagger for coming quarters on the underscore of a strong revival of demand, its innovative product launches and deeper penetration in new markets.